Certificate In Mortgage Advice And Practice (CeMAP) 1 Practice Exam

An Agreement in Principle is a preliminary indication from a lender about the amount they would be willing to lend, based on a quick check of your finances and the information you’ve provided. It doesn’t commit you to the loan or guarantee that it will be approved; it’s subject to fuller underwriting, income verification, a formal credit check, and a valuation of the property. This is useful because it gives you and anyone involved in the purchase a sense of affordability and a credible upper limit to use when searching for a property or making offers. It helps you, and the seller, see that financing is feasible up to a certain amount, without waiting for a full application to be processed. It’s not a formal mortgage offer, and it’s not an agreement between you and a broker. It also isn’t a payment or fee required by the lender.